A sell-off all major markets on Monday looks set to continue today with the ASX looking at a 1% slide off the back of Wall Street’s deeply red session.
Oil prices fell 4%, gold lost more than 2%, copper and silver slid as the US dollar rose, US bond yields fell as a flight to safe-haven investments drove sentiment.
Overnight trading saw ASX 200 futures lose nearly 60 points (it was over 70 points early in the session), meaning the local market will start Tuesday with big losses – as it finished Monday’s session.
Wall Street slid to seven-week lows on Monday as concerns about fresh coronavirus-driven lockdowns in Europe raised fears economies around the world face a longer road to recovery than expected.
The death of US Supreme Court Justice Ruth Bader Ginsburg and the expected political battle to replace her increased the likelihood another stimulus package will not be approved in Congress before the November 3 elections which added to the sell down pressures.
US bond yields fell as investors sought safe havens – the yield on the key 10 year security down 2.4 points to 0.670%.
At one stage the Dow was down 900 points and the S&P 500 more than 100 points, but a late buying rush trimmed the losses, especially for Nasdaq which ended the session nearly flat.
The Dow 1.84% to end at 27,147.70 points, the S&P 500 shed lost 1.16% to 3,281.06 and the Nasdaq ended down just 0.13%,at 10,778.80.
The ASX has lost all the gains in the current third quarter after the key ASX 200 fell 41.9 points or 0.7% to close at 5,822.6 on Monday, its lowest since June 29.
The market has now shed 5.5% since it closed at a post-pandemic peak of 6,161.4 on August 25.
And September has proven to be the most miserable of months (as it some times is) with losses of The market is now down 3.9% for the month so far.
That’s more than $100 billion knocked off the market’s capitalisation in the space of a month.
The US dollar was up sharply against its rivals and the Aussie dollar lost a cent to trade around 72.20 US cents early Tuesday morning.
Comex Gold futures dropped by nearly 3% on Monday, amid an apparent flight to dollars and rising global risks, including renewed COVID-19 lockdown measures in Europe, partly to blame as bullion prices slumped to their lowest finish in two months.
Comex December gold lost $51.50, or 2.6%, to settle at $US1,910.60 an ounce after trading as low as $US1,885.40. The settlement was the lowest since July 24, according to FactSet data.
Comex December silver dropped $US2.74, or 10.1%, at $US24.387 an ounce, after last week 1% weekly gain. It was the lowest since July 31.
It was a similar story for Comex copper which on Friday hit two year plus highs. On Monday December copper slumped 2.7% to settle at $US3.032 a pound.
West Texas Intermediate crude for October delivery fell $US1.80, or 4.4%, to settle at $US39.31 a barrel in New York, ahead of the contract’s expiry at the end of Tuesday’s session.
In Europe global benchmark, November Brent crude shed $US1.71, or 4%, to $US41.44 a barrel as traders worried about the resumption of crude shipments from Libya, the rising toll of covid cases across Europe, India and the uS (200,000 deaths now in America) and the weakness in equity markets.